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Wednesday, 28 July 2010

Interest on damages for infringement not a correctable error

Yesterday's decision of Mr Justice Floyd (Patents Court, England and Wales) in the latest round of Leo Pharma A/S and another v Sandoz Ltd[2010] EWHC 1911 (Pat) (see earlier post here) picks up following the trial of an action in which Leo Pharma's patent infringement claim against Sandoz was upheld. A draft order before the court included a provision that

'The Defendant shall pay to the Claimants any sums found due on the taking of said inquiry into damages or account of profits together with interest at the judgment rate (being 8%) from the date of this Order".

The court decided to stay the final injunction pending Sandoz's appeal, directing the parties to draw up a minute of order. Leo drafted and sent to counsel for Sandoz an order which included the provision as to interest which the court's draft order had contained. Sandoz suggested a different order -- which did not include the paragraph quoted above -- which Leo did not accept. A little later, counsel for Sandoz said that, to avoid unnecessary costs, his client was prepared to agree to Leo's proposed form of order. The minute of order, including the paragraph in question, was then signed by junior counsel for both sides.

Later Sandoz applied under Civil Procedure Rule 40.12 to correct what it said was an accidental slip or omission in the order, seeking deletion of all the words following "account of profits", or at least of the words defining the rate and period of interest, on the basis that they had never been discussed. According to Sandoz, the court intended to make no such order about the rate and period of interest and that there had been a genuine mistake by counsel in agreeing to the terms of the order, since he never intended to agree the rate or period of interest. Leo, none too happy about this, asserted that when the agreed minute of order was placed before the court, the court definitely intended to make the order in those terms, and that even if there had been a mistake it wasn't a correctable one.

Floyd J agreed with Leo and dismissed the application.

* the operation of the slip rule only covered accidental slips or omissions, a far cry from matters deliberately included by the parties in an order drawn up and sealed by the court.

* On the facts, the order as made was not inconsistent with the intention of the court at any stage of the proceedings.

* A court should be most careful before going behind an apparent agreement between counsel, since counsel's signature on a minute of order was relied on as being conclusive of a binding agreement.

The judge said at para.12:

"The rule is described in the White Book notes as "one of the most widely known but misunderstood rules". The notes point out that the rule is essentially there to correct typographical or other careless errors, but goes on to point out that it can be used by the court to make the intention of the court plain".